Petrotrin sues Malcolm Jones over US$109m GTL project payment Published: Thursday, July 18, 2013 Text Size: Malcolm Jones ENERGY REPORTER State-owned Petrotrin has sued its former executive chairman Malcolm Jones, alleging he breached his fiduciary duty as a director of the oil company in approving the payment of US$109,407,892 in cost overruns in the failed world gas-to-liquids (GTL) project. Through its attorney Gerald Ramdeen, Petrotrin is alleging that Jones, as a director of Petrotrin, approved several guarantees to World GTL which he ought to have refused to do. In its statement of claim which the Business Guardian obtained a copy of, Petrotrin is alleging Jones “executed the joint and several agreement, without simultaneously or prior to such execution, directing and/or procuring the recognition and amendment of the shareholders agreement and/or the general project agreement to provide that, in the event Petrotrin should be called upon to advance funds pursuant to the joint and several agreement, Petrotrin will be entitled to assume management and financial control of the construction of the GTL plant.” Petrotrin is seeking damages or alternatively equitable compensation. It also wants a declaration that Jones was in breach of fiduciary duty and failed to disclose to the board of directors and or the shareholders the breach of duty. The company is also claiming legal fees. World GTL Trinidad Ltd, a joint venture between World GTL Incorporated and the Petroleum Company of T&T (Petrotrin), the Government wholly-owned integrated petroleum company, was expected to be the first commercial GTL facility in the Americas. The plant was expected to be fully operational in 2008. Attorney General Anand Ramlogan alleged that Petrotrin entered into a project agreement with WGTL to construct and operate a GTL plant on Petrotrin’s refinery compound at Pointe-a-Pierre. That agreement provided, among many other matters, that by July 12, 2009, (“the date certain”) the project had to be sufficiently completed to produce a certain amount of diesel. In the event the required amount of diesel was not produced by that date, the loan became immediately due and payable. Ramlogan said the project was mismanaged and did not proceed according to plan, and as a result, there were, incredibly, a total of 33 cost overruns. In each case, WGTL was unable to fund its portion of the cost overruns. In every case, Petrotrin had to step in with its own funds to pay WGTL’s share of money due. In total, Petrotrin paid more than $600 million (US$97,107,993) on behalf of WGTL in addition to contributions on its behalf of more than $580 million. At all stages, WGTL refused to transfer to Petrotrin any shares in the project company, despite WGTL’s clear obligation so to do. In an exclusive interview, Jones told the Business Guardian he was surprised that Petrotrin had sued him and not the other directors of the company. He said: “I have worked in the energy sector for more than 45 years and I have given my talent energy and commitment to the local energy sector and I feel hurt, in the twilight of my career, to be hounded like this.” Jones said every decision he made, whether wrong or right, was made with the full knowledge and support of the Petrotrin board. “What do they think I am? Do they think I am a mad man who makes decisions on my own?” Jones asked. Jones said he was not wealthy man and had worked hard to build a career, having come from humble means, and was now being made to take what little money he has to spend on lawyers to defend his name. Jones is an engineer, a former president of the National Gas Company, Titan Methanol and Petrotrin. He was the 2004 recipient of a Chaconia Medal (gold) for his contribution to the energy sector. Business Guardian
Posted on: Thu, 18 Jul 2013 12:23:02 +0000
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